The Scandinavian role model
Around the world public sector are already using analytics to fight fraud and have good knowledge about analytics. Now it is time to take the next step. This will be possible by integrating analytics in all core business areas to strengthen strategy, tactics and operations.
By Niklas Huss, Business Advisor, SAS Institute. Previously head of business architecture at Sketteverket in Sweden.
The Scandinavian tax authorities have gone through a fantastic change since the millennium. They are often perceived as role models amongst other tax authorities but could serve as a role models for the whole public sector globally. By basing the strategy as well as business processes on creating value for the citizen and then applying analytics, the services provided have become more available, more meaningful and certainly more cost effective.
In most countries, authorities are already using analytics to fight fraud and have good knowledge about analytics. Now it is time to take the next step. Bringing these authorities to a new level will be possible by integrating analytics in all their core businesses to strengthen strategy, tactics and operations. This means integrating analytics in the daily work for many thousands of employees. Tax authorities could then very well be a Scandinavian export success.
There is a general public support for the Scandinavian welfare model. This becomes apparent during election campaigns where there is widespread agreement in the Nordic countries to protect the welfare society. Scandinavians believe – once again, in general – that they get value for their money from the government, the regions and the municipalities. Therefore, Scandinavians are willing to pay taxes and contribute to the welfare system.
One of the main characteristics in tax collection is to trust the citizens and support them to pay tax. Compliance and trust have been two important cornerstones in the change that has been made. By adding analytics to the core business, tax authorities can build and further enhance this trait by bringing the citizen in focus and making it even more convenient for the individual to pay tax.
Meet the tax payer
Tax authorities sit on a gold mine of data and now is the time to fully exploit this huge asset. Meeting the individual tax payer in the right channel, in the right time, in the right tone of voice is very crucial to the future tax collection and to build trust and support. Building trust will increase if tax authorities have knowledge of the individual person or company and make the knowledge an asset when planning communication to the specific tax payer – or groups of tax payers. It can also be used to create conditions for needs-driven development example for future e-services. In itself this will save time and money in the case handling as more tax payers will do less mistakes.
It's all about trust
If you look at the tax collection from a socio-economic perspective, the main challenge for tax authorities is to utilize data when communicating with the citizens. This will enable a strong self-service for tax payers that builds trust and reduces the risk of erroneous entries. Tax collection is more about trust than control. And the general support and understanding from the public is extremely important.
Deliberate tax evasion only constitutes a very small part of lost tax revenue compared to the losses due to lack of knowledge, mistakes and misunderstandings. From a legal point of view, there may be good reasons for uncovering evasion and implementing control measures, however, compared to financing the social welfare model, information and service for citizens and companies is far more important.
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